Obligations and Contracts: An Overview

Obligations and Contracts Overview

• Obligation is a legal necessity to give, do, or not to do something
• Juridical necessity implies a legal tie; noncompliance leads to legal sanctions
• An obligation is a duty of the obligor to satisfy a demandable claim of the obligee, enforceable in court if breached
• A contract creates obligations, but obligations can exist without a contract
• Damages refers to compensation for harm suffered due to violation of rights

Kinds of Obligations by Sanction

• Civil obligation is enforceable in court based on law
• Natural obligation cannot be enforced in court but authorizes retention of voluntary performance based on equity
• Moral obligation is sanctioned by conscience, morality, or church law

Kinds of Obligations by Subject Matter

• A real obligation is obligation to give
• A personal obligation is obligation to do or not to do

Kinds of Obligations by Affirmation/Negation Behavior

• A positive obligation is obligation to give or do
• A negative obligation is obligation not to do (including not giving)

Kinds of Obligations by Persons Obligated

• Unilateral involves one party bound, like Plato owing Socrates
• A bilateral involves both parties bound, like in sale contract

Bilateral Sub Kinds

• Reciprocal features parties dependent upon each others performance
• Non-reciprocal features one party independent from each other

Elements of an Obligation

• Active Subject (Creditor/Obligee): demands performance
• Passive Subject (Debtor/Obligor): performs prestation or fulfill obligation
• Prestation: the object
• Efficient Cause: the juridical tie or source
• Causa: reason for the obligation

Types of Object

• To Give delivery of a thing
• To Do perform work or services
• Not To Do refrain from certain acts

Object Requirements

• Must be Lawful
• Must be Possible
• Must be Determinate or Determinable
• Must have Pecuniary Value

Injury vs Damage

• Injury a wrongful act or omission by one party
• Damage results from it

Sources of Obligations

• Law imposed by law directly
• Contracts arising from stipulations
• Quasi-Contracts arising from lawful, voluntary, unilateral acts
• Delicts arising from acts or omissions punished by law
• Quasi-Delicts arising from damage due to fault or negligence

Rules for Source Obligations

• Obligations from law must be expressly stated, not presumed
• Obligations from contracts constitute law between parties in good faith
• For Quasi-Contracts, there is no consent, it is presumed
• Civil Code applies secondarily to obligations from laws

Negotiorum gestio and Solutio indebiti

• Negotiorum gestio has juridical implications when someone manages another property without being given notice
• Solutio indebiti deals with obligation when someone receives undue payment

Effects and Negligence

• Act art and civil negligince are both subject to art 2177 of the civil code
• Criminal liability includes restitution, reparation, indemnification

Regarding Acquittal

• Reasonable doubt results in no civil liablity
• Exempt result in civil liability
• Preponderance evidence results in civil laibility

Obligations to Deliver with Care

• Obligor must take care of the things with the diligence of a good father unless other standards are required
• Speaks of a determinate thing (specific, individuality identified)
• Obligor cannot take care of whole class/genus of something

Debtor Duties

• To care and preserve
• Diligence determined based on circumstances
• Deliver fruits, accessions/accessories, and also deliver the thing itself
• Also answer for damage if they do not fulfill or they breach the conditions

When the Fruits are Due

• Creditor has right from the time the obligation to deliver arises, but no real right until delivered
• Real Right: Right enforceable against the whole world
• Personal Right: Enforceable against a definite person/group of persons
• Ownership transferred by delivery

Types of Fruits

• Natural – spontaneous products
• Industrial – products from cultivation
• Civil – derived by virtue of juridical relation

Determinate vs Indeterminate (Generic) Things

• Determinate: Creditor may compel delivery, obligation extinguished by fortuitous events
• Indeterminate (Generic): Creditor can have obligation fulfilled at debtor's expense, obligation not extinguished by fortuitous events

Remedies After Undelivered (Determinate THing)

• Action to compel the fulfillment of the obligation – specific performance
• Action to rescind
• Action to claim damages

Risk Factors

• No person responsible for unforeseen (or inevitable) events unless: specified by law/stipulated by parties/nature requires risk

Obligation to Deliver

• Obligation to give a determinate includes that of delivering all its accessions and accessories
• Even if accessories are not mentioned

Accessions & Acessories

• Accessions are things produced or permanently attached whether natually or artificially
• Accessories things there for better use

Actions When Obligor Does Not Fulfill

• Creditor performs, seeks another at debtor price, recovers damages
• Performance contrary to agreed terms allows for the use of the court to undo expense
• If it is poor, the orders undo them at said price

Obligation Not Requiring Action

- Obligor is forbidden in action that cannot happen
- They should be reimbursed at his expense

Legal Recourses

• When obliged to do an action that is delayed by the court and the creditor
• No demand required: the law states, contractual time is fundamental, it is deemed in effect, debtors agree this is possible

Fault vs Harm

• A deliberation cannot stop one from the terms if injured to pay from that damage
• A fault negligence has to account for place, time, and the nature of the agreement.

When a situation arrives

- A promise makes you reliable as if you’re a good father looking out for the best support
- You have a third the diligence required by the contract of particular arrangements

Recourse Under the Law

• If an agreement is not mentioned there is no need to consider the fault
• Unless there is a need to have some damage come into play where the court can consider it in good standing

Fraud vs Negligence

• With fraud there is a deliverance in action
• No deliverance will be an issue due to negligence

In both a waiver

• Cannot exist for the deliberate as per the case of fraud.
• However may be allowed in situations relating to gross negligine and the public is involved

Diligence requires care

• This is determined during the action of both opposite of what is required by negligence

Negligence is omitting diligence

• It needs to be noted, to where, and also if it has the requirements of the obligation
• Like family a reasonable person does not abandon his the requirements of the

Kinds of dilengence

- Good character
- The law
- Agreed

In the case if an obligor cannot pay

- He required to perform his duties to be responsible. With the terms of the contract

Usury transaction require special needs

• Contracts, loans, etc
• Must be allowed by law or government can get involved

Simple Loan one party delivers

• Can only receive the equivalent value as the items given

In debt of an intrest

- The creditors need them

• This is all per assumption

The courts

- Can come in the case of fraud
- And they will look into contracts

The courts will also pursue

Section 3 Alternative obligations

• A personal has to do another action based on all agreements There has to be obligations